Online real estate listing firm Zillow Group Inc. (NASDAQ: Z) is placing a bet that it can compete with its real-estate broker customers and not go up in flames in the process. That’s a risky play, no matter what business a company’s in, and investors are not entirely behind the company’s play.

On Thursday, Zillow announced that it will expand a trial program called Zillow Instant Offers to include real estate in Phoenix as well as Las Vegas and Orlando, where the program has been testing since May of last year. Essentially the Instant Offers program gives home sellers a chance to sell their property to an investor without having to go through the whole home-selling ritual of showing the house and weighing offers and hoping for the best.

The wrinkle here is that in addition to making investor-buyers aware of a new property on the market, Zillow plans to buy and sell homes (that is, “flip” them) itself:

Beginning this spring, home sellers in the Phoenix and Las Vegas real estate markets will be able to compare an agent’s comparative market analysis (CMA) to offers from Zillow or other investors.

When Zillow buys a home, it will make necessary repairs and updates and list the home as quickly as possible. A local agent will represent Zillow in the purchase and sale of each home, enabling agents to earn commissions.

Zillow plans to own 300 to 1,000 homes in its inventory (and on its balance sheet) by the end of the year. At the low end and assuming 150 homes in each of Phoenix and Las Vegas, that’s $34 million at a median price of $227,300 per home in Phoenix and about $37 million at a median home price of $247,700 in Las Vegas.

At the end of December, Zillow’s total current liabilities amounted to $118.4 million. Adding 300 homes increases that total by 60%. Zillow reported cash and equivalents of $352 million at the end of December and short-term investments totaling $410 million.

A more important issue may be how agents will respond. Zillow claims that it has selected agents from its Instant Offers business to work on the transactions. But if Zillow is bidding against other investors to make these flips, there’s less need for an agent to be involved.

Zillow expects to make a profit from flipping homes by charging the seller a fee in addition to agent commissions. The company’s chief marketing officer noted that most sellers end up selling their homes in the traditional manner, but the Instant Offers plan gives sellers a choice they didn’t have before.

Investors are cautious. Zillow’s stock traded down more than 9% right after Friday’s opening bell, at $48.57 in a 52-week range of $34.52 to $59.99. The 12-month consensus price target on the stock is $52.50.

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